U.S. Gulf:
NOLA barge prices continued to shoot up, with sources saying the market is following international prices. The latest trades were put at $790-$812/st FOB for November, up from the week-ago $720-$750/st FOB.
U.S. Imports:
Imports of urea were up 14.8 percent for September, to 261,778 st from the year-ago 228,055 st. July-September totals stood at 983,955 st, rising 77.2 percent from the year-ago 555,315 st.
Qatar imports totaled 267,633 st for July-September, a 68.2 percent increase on the year-ago 159,078 st. Canada leapfrogged Russia and Saudi Arabia into second place with 159,026, a 56.8 percent increase from 101,414 st last year. Russia registered the third-largest import origin with 145,600 st, topping 138,009 st from Saudi Arabia.
U.S. Exports:
Urea exports for September stood at 16,146 st, down 80.0 percent from the year-ago 80,888 st. July-September exports were reported at 47,920 st, off 85.7 percent from the prior-year 335,937 st.
Eastern Cornbelt:
The urea market in the Eastern Cornbelt vaulted higher in the wake of a firming NOLA barge market. New levels at midweek were up a full $75-$100/st from the previous week, and included $845-$850/st FOB Cincinnati, Ohio, $850-$860/st FOB Illinois River terminals, and up to $875/st FOB Michigan terminals.
Urea prices in the South Central region ranged from $805-$845/st FOB, depending on location and time of the week, with the Convent, La., market pegged firmly at the $820-$830/st FOB level at midweek.
Western Cornbelt:
Sources reported significantly higher urea prices in the Western Cornbelt. Sources quoted the market at $850-$870/st FOB, up a full $100/st from the previous week, with St. Louis, Mo., pricing pegged firmly in the $860-$870/st FOB range as the week progressed.
In the Southern Plains, the Catoosa/Inola, Okla., urea market was reported at $855-$870/st FOB.
Northern Plains:
Sources reported much higher urea pricing in the Northern Plains. The St. Paul, Minn., market was pegged at $850/st FOB for the last prompt business, up another $50-$70/st from the previous week, with reports of river-open offers in the $865-$875/st FOB range at that location.
Delivered pricing jumped to $885-$945/st in North Dakota and Montana, and up to C$1,225-$1,245/mt DEL in Western Canada for spring tons, up from the prior week’s C$1,120/mt DEL level.
Northeast:
The urea market jumped to $850-$875/st FOB in the Northeast, up $100/st or more since mid-October. In the Southeast, new pricing FOB Savannah, Ga., was reported at the $850/st level or higher at midweek, up a full $120/st from last report.
Eastern Canada:
Urea pricing in Eastern Canada had reportedly jumped to a wide C$1,200-$1,335/mt FOB range, depending on location, up from C$960-$1,200/mt FOB in mid-October.
India:
The IPL tender closed on Nov. 11 with 16 companies offering about 2.5 million mt. The lowest offers came from Keytrade at $981.64/mt CFR for West Coast delivery, and Fertiglobe with 180,000 mt at $998.50 for East Coast delivery.
The fact that IPL released the tonnage and prices offered is an indication of how fast the company wants to issue awards. Normally the tonnage is released first, followed by the prices in another day or so.
The prices offered indicate how volatile the market has become. The Nov. 1 RCF tender closed with prices in the $890s/mt FOB for a landed price at the Indian West Coast of $923/mt CFR. If the Keytrade price is accepted, that would represent a $50/mt jump in less than a fortnight.
| Offering Company | Quantity (mt) | US$/mt CFR | Discharge Port |
| Amber | 30,000 | 999.99 | ECI |
| 30,000 | 1,199.99 | WCI | |
| Ameropa | 246,450 | 1,028.00 | ECI |
| 491,900 | 1,018.00 | WCI | |
| Continental | 100,000 | 999.75 | WCI |
| 1,003.25 | ECI | ||
| Dreymoor | 136,000 | 1,034.42 | WCI |
| 100,000 | 1,184.42 | ECI | |
| Eurochem | 50,000 | 1,050.00 | WCI |
| Fertiglobe | 180,000 | 995.00 | WCI |
| 998.50 | ECI L1 | ||
| Keytrade | 97,500 | 981.64 | WCI L1 |
| Koch | 49,500 | 1,014.00 | ECI |
| 135,500 | 1,101.00 | WCI | |
| Midgulf | 50,000 | 1,027.00 | WCI |
| 50,000 | 1,040.00 | ECI | |
| OCI | 140,000 | 999.25 | ECI |
| 995.75 | WCI | ||
| OQ Trading | 94,300 | 1,013.00 | WCI |
| Samsung | 92,000 | 1,022.00 | ECI |
| 187,000 | 1,014.00 | WCI | |
| Swiss Singapore | 45,000 | 1,096.50 | ECI |
| 90,000 | 1,091.00 | WCI | |
| Transglobe | 45,000 | 1,024.00 | ECI |
| Offering Company | Quantity (mt) | US$/mt FOB |
| Muntajat | 45,000 | 1,000.00 |
| SABIC | 50,000 | 984.00 |
The Indian buyer moved quickly with counterbids reflecting the offers from Keytrade and Fertiglobe. Responses are due Nov. 15. Awards are expected to be issued quickly following any acceptances of the bid. The shipping deadline is Dec. 31.
Sources said even if IPL makes a large purchase this time around, at least two more tenders will be needed to shrink the country’s urea deficit by the end of the first quarter. Sources speculated that the final take in this tender will be just under 1 million mt.
Soon after the IPL tender was called, sources speculated that if the price is high enough, the Indian market could draw tons away from other buyers. So far this week, sources said traders were quietly letting buyers in Brazil and Bangladesh know that their cargoes might be delayed so the tons could be diverted to India.
The lowest price for the West Coast of India indicates a netback to the Arab Gulf of $950/mt FOB, which matches a reported deal done earlier in the week. The price submitted by SABIC and Muntajat are clear indications that the Arab Gulf producers expect to see higher prices into the new year.
Middle East:
A 45,000 mt cargo of granular urea was purchased from SABIC at $950/mt FOB for a December loading. Sources speculated the material is slated to be part of the offerings in the IPL/India tender. The SABIC offer of $984/mt FOB in the IPL tender showed that producers expect to see higher prices for a while.
Sources reported that RCF/India was shopping around for a vessel to pick up tons from the area for late-November or early-December loading. This would be tied to the producer-only tender that closed on Nov. 1. There are also reports of traders looking at vessel availability and prices for December shipments from the Arab Gulf to India. This is seen as traders getting ready for the Nov. 11 IPL tender.
The market was hit this week when the Egyptian government stepped up its demand that producers look to the domestic market first. A new ruling stated that producers needed to reserve 55 percent of their rated production capacity for the domestic market.
Sources estimated that the rated production is about 535,000 mt/month. Under the new government edict, the producers would only have 241,000 mt available for export each month in November and December. This amount is troublesome.
Sources estimated that producers have already committed to shipping 200,000-250,000 mt in each of the two remaining months of the year. Rumors are circulating that some producers might pull back tons committed to traders for export or tell traders their cargoes will be delayed a month or two.
Rumors of losing tonnage even circulated in Brazil. Sources there and in Asia said the combination of the Indian tender and the Egyptian government action could mean that urea originally destined for the South American country could be scrapped or delayed well into the first quarter of 2022.
Another rumor making the rounds, but unconfirmed out of Egypt, is that the government may settle for producers holding back 25 percent of their production. Even if that rumor plays out, sources said the Indian market is currently more attractive to producers than Brazil or other buyers. Tons slated for Brazil could still be delayed and offered to India.
Even as the availability of Egyptian product is up in the air, Abu Qir reportedly settled a deal to ship out 15,000 mt of granular urea at $925/mt FOB. This price represents a $25/mt rise from the upper end of the price range from last week.
South Korea:
The Chinese export restriction has played havoc with the South Korea liquid urea market. The product, diesel exhaust fluid, is required for diesel vehicles in the country.
The concern was so great that the Korean government sent a military cargo aircraft to Australia to pick up 27,000 liters of urea solution. News stories of a pending economic collapse in South Korea because trucks will soon be unable to operate unless the liquid urea supplies are replenished went global. In each story, the blame for the potential crisis was laid at the Chinese government’s decision to restrict urea exports.
By the end of this week, rumors circulated that the Chinese government relented and allowed the export of 110,000 mt of industrial grade urea so South Korea can make its own liquid urea. At the same time, the Korean government was negotiating with Russia – which has also limited urea exports – for a container of industrial urea.
Another deal with Vietnam was closed for 6,000 mt to be shipped next week. Sources said the South Koreans stressed the industrial needs for urea, and according to traders, promised none of the product would be used for agriculture or global trade as a fertilizer.
All told, South Korea imported 703,000 mt of urea during January-September of this year, according to Trade Data Monitor. About 567,000 mt, or roughly 81 percent, came from China.
Indonesia:
Producers remained quiet this week. Besides not having any more permits to export this year, many plants are on scheduled maintenance turnarounds, leaving no opportunities to test market prices.
Sources have speculated that once the IPL tender closes and awards are issued, the producers may begin pressuring the government to issue new export permits quickly so they can take advantage of the hot market.
Ethiopia:
The Oct. 29 EABC tender was scrapped after only one company submitted a series of offers. In the end, the company was disqualified and a new tender was called.
The new tender will be for 803,000 mt and will close on Nov. 19. The shipment period will be though March 2022, the same as the original tender. Reportedly, invitations to the tender were sent to a short list of pre-approved companies.
The lack of interest in the earlier tender, sources said, was attributed to apparent reluctance by some banks to finance the sales. Some trading houses have also complained in the past of delays in awards and then later in securing agreements on shipping.
Mexico:
Reports are circulating that Mexico may soon follow in the footsteps of China and Russia and limit exports of several fertilizers. Urea seemed to be at the top of the list, said one international trader.
Sources said the Mexican government is using the same reasoning as Russia and China: they want to ensure a low-cost, plentiful supply for the domestic market. However, some in the industry see the move more as an effort to further drive up international prices and then offer tons at a much higher level.
Brazil:
Brazilian and international traders all report that urea prices have hit $870/mt CFR at Paranagua. Local traders further argued that the range for deals this week topped off at $900/mt CFR. Some international traders argued that the higher number is under discussion but has not yet been concluded.
The IPL urea tender, along with export restrictions from Russia and China, as well as expected reduction in material available from Egypt, has buyers and sellers all discussing much higher prices. The expectations of Arab Gulf producers near $1,000/mt FOB are expected to be felt in Brazil soon.
Inland deals were limited as buyers remain hesitant to add to the rising prices. Rondonopolis is now pegged at $1,000-$1,030/mt FOB ex-warehouse. The barter rate has also moved to 125 bags of corn for 1 mt of urea.
Urea imports for January-October were reported at 6.2 million mt, up 14 percent from the 5.5 million mt imported during the same period last year, according to Trade Data Monitor. The main suppliers so far this year were Qatar at 1.5 million mt, Russia at 1.2 million mt, Algeria at 984,000 mt, and Oman at 843,000 mt.
The Oman total showed a dramatic increase. During the first 10 months of 2020, Brazil only bought 130,000 mt from Oman. Sources said the difference was because OMIFCO tons became available on the world market after negotiations broke down last year between India and the producer.
October imports were pegged at 863,000 mt, up 46 percent from the October 2020 imports of 593,000 mt. The main suppliers last month were Algeria at 181,000 mt, Qatar at 199,000 mt, and Nigeria at 132,000 mt.